Leaders Index 4-8-19

The market put in a positive reversal today. After opening with some real declines the major averages bottomed out in the first half hour of trading and rallied for the remainder of the session. All the major averages closed at their intraday trading highs, a sign of support. The Nasd averages were the strongest with the COMPQ and the NDX higher by .19% and .28% respectively. The SPX rallied .10%. Volume was lower across the board, but the decline was less than one percent on both exchanges. This means that different data feeds could have different results. Leading stocks underperformed the overall market with the leaders index falling .16% on the day. The index finished near the top of its trading range and above all its short term moving averages. Volume was lower and well below averages. The market put in a positive reversal today and all the major averages put in new highs for the move on both a closing and an intraday basis. This is good as the market continues to work its way higher and approaches the all-time highs of late last year. Those highs are only a couple of percentage points away from current levels so it looks like there is a good chance the market will reach and possible overcome those levels. One thing that bears watching now is the relative performance of the leading stocks. For most of the rally that began with the follow through the session after Christmas quality growth stocks have led the market higher. This is positive action. In recent action that may be beginning to change. Leading stocks are starting to struggle as can be seen in the relative strength line of the leaders index. It has been weakening and is now sitting on its 50dma. A break of this important support would be negative. In a rising market these stocks tend to lead the market higher, as they have done for some time now. If this changes it would be a big red flag as these stocks tend to top out ahead of the overall market. This is something that must be watched closely, but right now its loos like the major averages will make a run for the old highs. Jerry